Chinese Economy to Step into \"New Normal\"

Jointly organized by ChinaBusiness Journal and Instituteof Industrial Economics ofChinese Academy of SocialSciences， the \"China Business 2014Annual Meeting on EnterpriseCompetitiveness\" was held onDecember 18， 2014. The theme was\"Dream of the Newjourney\".

After 30 years， Chinese economyis now ushering in a revolutionarytransformation. The old businesstype at many development stages isnow changing. Originally， industrialdevelopment was extensive. Andnow people begin to figure out whatis building houses and how to runbusiness， which they were unawareof before. As scarce social resources，entrepreneurs bear the obligationto explore for the social reform andinnovation.

Chen Dongsheng， president ofTaikang Life Insurance Co.， Ltd.， saidthat \"new normal\"， to put it simple，means an emerging industrial powerwith continuous speedy developmentis in the transition to an intermediateor developed nation. Just look at thecompanies around us， then we may findthat these companies have been goingthrough a revolutionary reform since theyear of 2008.

In the upcoming 10 t0 15 years，industrial development will see aboom， such as the financial sector andespecially the medical sector， which isjust like Lei Jun's humorous metaphor\"pigs can even be blown up whenstanding in the tuyere\".

\"The society is stepping intothe aging process and medicalcare， insurance as well as pensionwill surge， which may gain bettermomentum under the new normal，\"said Mr. Chen. At present， lotsof infrastructure for tourism andentertainment calls for investmentsand medical insurance， pension aswell as various hospitals needs capital，which is a huge payment system andnetwork system. The modern servicesector also needs infrastructure andthe large input of investments willdrive new economic developmentunder the \"new normal\".

\"Now the opportunity iscoming. Both the entire entrepreneurgroup and the sector are supposed toembrace the transition for a betterfuture and to create the heritage ofentrepreneurial spirit for the nextgeneration，\" said Huang Nubo，chairman of Beijing ZhongkunInvestment Group.

When speaking of theindustrial transition of real estate，Huang said that the housing marketwill definitely step into the \"newnormal\". As for the commercialproperties， Huang said it is hard tojudge， as these years the commercialproperties have developed so rapidlywith new business types.

Jack Ma brought about a reformto China's retail business， which forcesthe traditional sectors to upgrade.However， where will those traditionalsectors bound for? Huang said: \"Everycompany has its own characteristics.Culture and spiritual consumption willdominate the future， and people willbe likely to turn to sports and culturalentertainment. Therefore， tourism is tobe builtinto a modern service system.\"

Farming sector is the largest

\"virgin land\" in China

Economists have no specialunderstanding about \"new normal\"，while for entrepreneurs the economyis still quite hot with abundantopportunities. Chen Shaopeng， seniorvice president of Legend Holdings andpresident ofYoyvio Group regards thatlots of opportunities do exist， such asthe \"blue sea\" of the farming sector.

\"For the next step， Legend Holdingaims to nudging into the farming sectorand now I am in charge of this businessline，\" Chen introduced. The largest \"virginland\" in China is farming， which lacks proper development. Chinese people badlyneed safe and quality food， but unluckilyfew companies are able to provide suchfood.

Eloancn， one product offered byLegend Holdings， is designed to grandloans to farmers via Internet P2P，such as family farms and professionalpartners. Peasants and farmers willpossess productivity once financialsupport is in place. With a strongtechnical background， Legend Holdingsbuilds up a platform for the professionalcooperatives and family farms to get theadvanced farming technologies at homeand abroad and to help them to realizetheir dreams.

Chen revealed that now foodproduced by any company relatedwith Legend Holdings carries a two-dimensional code， which consumers maysweep to see the entire manufacturingprocess as the information is totallytransparent. Thus， consumers canfully trust the food and the brand forconsumption.

Service sector to become animportant supporting industry

\"In the economic structure underthe new normal， two indexes decidewhich sectors will become importantones: demand index and technicalindex，\" said Weijie， director of ChineseEconomic Research Center ofTsinghuaUniversity.

Wei regards that three industrieswill lead the future. First is strategicemerging industries with eightdirections: new energy， new materials，bio engineering， new generation ofnew technologies， energy conservationand environmental protection， newenergy vehicles， industrial robots andhigh-end manufacturing， all of whichwill replace thetraditionalindustriesduring the nextthree years.

Second isthe service sector，which will turninto an importantsupporting sectorin future. In thepast， income growthmainly relied oneconomic growthand one demand mayprovide thousandsof jobs， whereas nowjobs are created inthe service sector. The service sectorwill witness tremendous developmentin future. To be specific， consumergoods， catering， pension insuranceand medical treatment promise hugepotential for development.

\"Pension insurance is not merelya matter of real estate， and investmentsto the pension insurance sectorneeds professional teams-medicaltreatment team and special serviceteam for the elder. These two teamswill stimulate the rapid developmentof the service sector and China willsee a bigger growth in terms ofconsumption service，\" said Wei， \"Inaddition， manufacturing service isa significant section in the servicesector， such as design. For instance，fashion design， industrial productdesign and architectural productdesign need upgraded manufacturingservice to gain further development.Moreover， the spiritual service in theservice sector is also a big segment(incl. the entertainment domain aswell the literature arts domain)，which can be reflected in a seminar ofthe literature arts domain recentlyheld by President Xi Jinping. In theupcoming couple of years， the servicesector will grow into a pillar industrywith rapid development.\"

Third is modern manufacturing:airplane manufacturing， high-speed rail equipment manufacturing(the large export of domestic high-speed rail equipment will drivemany industries and then stimulateeconomic development)， modernship building (as China is a bigocean nation， modern ship buildingis an important support)， nuclearelectricity and ultra-high-voltagepower transmission and transformerstation.

2016 and 2017 to be the real \"new normal\"period

Li Zuojun， deputy directorof the Resource and EnvironmentPolicy Research Center under theDevelopment Research Center of theState Council， divides the transition tothe \"new normal\" into three stages bytime sequence. \"The first stage is thenormal period: 1978-2010 0r 2002-2012 by another theory defined by rapideconomic growth， extensive economicdevelopment， industrial developmentdominance and government-ledeconomic mechanism. The periodfrom 2012 t0 2016 0r 2017 is called the'transition' stage with neither new norold features or the new and old mixed.At this stage， economic growth is notstable or sustainable， which yet won'tlast long.\"

According to Li， the year of 2016and 2017 will be the real \"new normal\"stage， where many new business typeswill emerge. Since \"new normal\" is akind of normal， it will undoubtedlystay stable. With big adjustment ortransition， normal will no longerexist. Besides， new normal should besustainable. At present， the Chineseeconomy is in the transition coursefrom the \"old normal\" to the \"newnormal\"， which belongs to the period ofconsiderable transition and reform.

How will the companies survivethe magnificent reforms? Li offered thefollowing suggestions: first， find a freshpositioning， as the new transition callsfor a new positioning; second， developnew products and services， whichmeans to develop new products andservices with huge potential in futureunder the new circumstances and thenew positioning; third， cultivate newelements; fourth， explore new markets，including both the emerging marketsat home and abroad; fifth， build newbrands， which is the most importantfactor for companies to consider howto properly discover a proper \"newnormal\" in the transition course withbig changes.